DEVELOPMENT PARADIGMS FRICAN DIGITAL INNOVATIONICT4D research Examples of software/apps Transaction Costs • Olumoye, 2018, ^integrated e-Government implementation in Nigeria; •

DEVELOPMENT PARADIGMS &

AFRICAN DIGITAL INNOVATION: The Cage of New Institutional Economics

Dr. Laura Mann

Assistant Professor

International Development Department/Firoz Lalji Centre for Africa

London School of Economics and Political Science

(and co-author, Gianluca Iazzolino, Research Associate, ID/FLCA, LSE)

Email: [email protected]

Twitter: @balootiful

mailto:[email protected]

3 key arguments:

1. Development as an intellectual battlefield.

2. African Digital discussions are stuck in a NIE cage .

3. A more heterodox perspective: ICTs as platforms for competitive

commercial R&D.

PART 1: DEVELOPMENT AS AN

INTELLECTUAL BATTLEFIELD

Knowledge impacts upon economic

development and global competition

in two ways:

First knowledge can make economies

more competitive in existing areas of

production through knowledge

acquisition and technology transfer.

Second, knowledge can help move

countries out of fierce competition

in commodity production into new

activities with higher barriers to

entry. I.e. capturing knowledge

rents through R&D and

commercialisation.

Most importantly, industrial

policy involves incentivizing and

assisting firms and farms to build

their technological capabilities

through acquiring new

technologies and investing in

learning how to use them

efficiently (Whitfield et al., 2015:

35).

(See also Sutton et al., 2016,

Oqubay, 2015 UNECA, 2016).

Effective insertion into global export

markets offers the potential for

sustainable income growth. … The key to a h ie v i g th e e e fi ia l o u t o e lies in the capacity to identify,

appropriate and protect rents, and in

the context of intense global

competition, to develop the capacity

to master dynamic capabilities in

order to generate rents on a

sustainable basis… [A] major category of rents are those that are created by

producers, increasingly through the

systematic application of knowledge

to production. (Kaplinsky and Morris,

2016: 626 and 626).

(see also OECD; Naude, 2010; Sutton,

2010; Greenwald and Stiglitz, 2013;

Mazzucato, 2015; Shimada, 2015;

Newman et al., 2016: 85-154).

Some have described this change as bringing about an

industrialisation of freshness (Cramer, 2015) while

others such as Carlota Perez have suggested that

resource-rich economies within Latin America and Africa

might be able to use their rich natural resources to

develop their own geographical-cum-technological

barriers to entry within the global economy (Perez,

2015; Whitfield et al., 2016).

Renewal of the development process

depends on reinvesting the knowledge

surplus into broad-based productivity and

back into further knowledge production…

The struggle over the technological

surplus is not just a competitive

struggle between countries but

also to a certain extent, a struggle

between public funders of science

and innovation and the private

firms that commercial that science

(Mazzucato, 2015).

Development is an

intellectual battlefield in a

second sense;

that mainstream policy

paradigms have been

subject to epistemic

contestation over time.

Independence

Era

1980s- 1990s 1990s onwards Mid 2000s

onwards

Economic

Policy

Productivist/stru

cturalist: strong

emphasis on

Industrialisation

Neo-liberal:

Getting the prices

right

New

Institutional

Economics:

Getting market

institutions

right

Growing

heterodoxity:

Re-emergence

of industrial

policy (although

debate).

Social

Policy

Universal Limited Residual/

targeted

Transformative

agenda re-

emerging but

institutionally

fragmented

(many NGOs).

Higher

Education

Policy

Linked to

economic

planning.

WB denunciation of

HE funding. The case

for liberalisation for

both financial and

social reasons.

Renewed

emphasis by

WB but very

donor-driven

and

institutionally

fragmented.

Domestic

support returns

but still

institutionally

fragmented.

Mkandawire (2014: 179) asks: do we inhabit an open

marketplace of ideas in which ideas merely emerge

from the economic reality of the time or do we inhabit a

rigged marketplace in which those with influence and

financial power are able to shape the research agenda

and developmental paradigm in relation to their own

ideas and interests?

PART 2: THE NEW INSTITUTIONAL

ECONOMICS PARADIGM AND AFRICAN

DIGITAL ECONOMIES.

ICT4D research Examples of software/apps

Transaction Costs

• Olumoye, 2018, integrated e-Government implementation in Nigeria;

• Wenner et al., 2017, Organizational models of mobile payment systems in low-resource environments

• Alam and Wagner, 2016, The Relative Importance of Monetary and Non-Monetary Drivers for Information and Communication Technology Acceptance in Rural Agribusiness

• Boateng, 2014, Resources, Electronic-Commerce Capabilities and Electronic-Commerce Benefits: Conceptualizing the Links

• Baro and Endouware, 2013, The Effects of Mobile Phone on the Socio-economic Life of the Rural Dwellers in the Niger Delta Region of Nigeria

• G2P payments: Bourse Familiale (Senegal), SAGE (Uganda);

• P2B payment services: Kopo Kopo (Kenya); BambaPos (Kenya).

• B2B payment service: Cellulant, ConnectAfrica (Kenya) • P2P payments: Nomanini (Kenya), designed to facilitate

transfers in the informal economy; Forex, Eastpesa, to perform cross-border payments in East Africa; Bitpesa (Kenya), Blockchain-based money transfer service

• Aggregators for bulk payments: InTouch (Senegal), Yo Uganda (Uganda)

• Early arguments about possibilities of Business Process Outsourcing ( flat earth and global opportunities

Information Asymmetries

• Furuholt, 2018, The role telecentres play in providing e-government services in rural area ;

• Qureishi, 2017, The forgotten awaken: ICT s evolving role in the roots of mass discontent

• Riggins and Weber, 2017, Information asymmetries and identification bias in P2P social microlending;

• Kampenhout, 2017, There is an app for that? The impact of community knowledge workers in Uganda;

• Islam and Gronlund, 2011, Bangladesh calling: farmers' technology use practices as a driver for development;

• Aker and Mbiti, 2010, Mobile Phones and Economic Development in Africa;

• M-Cow (Kenya) provides relevant information (on market prices, weather, livestock and crop health) to farmers;

• Abacus (Kenya) helps local and international investors get information about business opportunities in Kenya;

• Jumo (Kenya) allows several SMEs to share behavioral data from mobile usage to create financial identities;

• Tala (Kenya) provides customer credit scores to financial institutions.

• Arguments made about digitizing auction (as in tea, flower and coffee) and marketing boards.

Property rights

• Mulalu and Veenendal, 2015, PGIS Based Land Information Mapping and Map Updating to Support Rural Community Knowledge Building

• Tamowke, 2012,

• Duvail et al., 2006, Participatory Mapping for Local Management of Natural Resources in Villages of the Rufiji District (Tanzania)

• GhanaPostGPS - Ghana's official digital property system • Bitland (Ghana) Blockchain-based registration system; • MAST (Mobile Application to Secure Tenure), USAID-

initiative currently deployed in Tanzania and Zambia; • Kadaster (Jordan), an initiative to digitize land records; • Aadhard (India), a large scale biometric identification

system to provide all Indian citizens with an ID number linked to biometric indicators and incorporated into formal land transactions to avoid fraud.

There is much less attention to the potential roles that ICTs might

play in reducing production costs. In fact, ICTs have often been

positioned as technologies that can leapfrog other infrastructural

deficits like transportation and electricity infrastructure.

Yet African countries will absolutely need to build strong transport

and electricity infrastructures if they want to reduce production

costs and seriously compete within the global economy. Increasing

market efficiency and assuring property rights will only get you so

far (See Murphy and Carmody, 2015; Foster et al., 2018).

Further, the NIE perspective does not help us think

strategically about the role of ICTs within the knowledge

economy.

WHY THE NARROW FOCUS ON NIE?

1. Much research funding is driven by commercial interests of tech firms like Facebook, IBM, Mastercard, and Visa who have an interest in focusing attention on NIE issues (see Mann, 2018).

1. The donor community remains an

important consumer of digital innovation and their approach to economic growth and social policy remains less heterodox and more residual.

1. Popular appeal of the Silicon Valley

culture among tech developers and perhaps a limited understanding of the context in which many digital innovations within the US emerged (i.e. from federally funded labs). See Block, 2011; Weiss, 2014; Mazzucato, 2015).

IBM Research - Africa Scientists

at Riara School, Nairobi.

PART 3: THE ROLE OF DIGITAL

TECHNOLOGIES IN A COMPETITIVE

KNOWLEDGE ECONOMY

But also data gatherers.

And platforms for

research and

development.

ICTs as market enablers (in

the New Institutional

Economic) frame…

Important Notes on African R&D

1. Adjustment era has had a profound impact on African institutions of higher education and research: massive brain drain, switch of curriculum away from research towards professional courses, dependence on foreign funding, a context in which African researchers are often forced into the role of data gatherers for foreign research projects (Mamdani, 2007).

1. Due to the dependence on foreign sources of finance, research in

African countries is heavily dominated by donor paradigms. 1. Particularly, as research becomes increasingly commoditized and

audited within advanced economies, there is a strong emphasis on commercial applications of publicly funded research and humanitarian aid. Thus in both the private and public sector, we see an increasing overlap between the developmental paradigms of donor countries, their research agendas and the commercial interests of their firms and scientists (McGoey, 2014).

The growing importance of the

private sector and value chains

compelling the incorporation of

a business school optique into

research and training (Moock,

2011: 16)

Platform Extension

Worker User Digital Disintermediation

or Re-intermediation?

ICTS IN RESEARCH ACTION

Photo from interview with m-health firm in

Rwanda, 2013

If we think back to the idea of development as

being about generating a sustainable technological

surplus, we see how ICTs can become platforms

for extracting technological surplus from existing

value chains. Therefore while ICTs increase

efficiency for their users (through the NIE

paradigm), they also generate a new kind of value

from the data itself.

Struggles over

Data-Driven Agro-Innovation in

California’s Central Valley and

Kenya’s Rift Valley

http://www.lse.ac.uk/africa/research/twov

ys

http://www.lse.ac.uk/africa/research/twovalleyshttp://www.lse.ac.uk/africa/research/twovalleyshttp://www.lse.ac.uk/africa/research/twovalleys

• Farmers in both regions are deploying

digital technology to

increase productivity

and reduce transaction

costs. Some are also

using tech to move

into new areas with

technological

premiums (single

origin, fairtrade,

organic, etc.)

• As compliance hardens or as farmers integrate

within larger input and

supply chains, these

digital systems may

become requirements.

• Informational chains have value beyond

farmer and compliance

agency, providing the

platform operator with

valuable market

intelligence and

framework for R&D.

• Thus while digital platforms promise to

increase production,

reduce waste and

ensure compliance, they

also generate a new

economic value (or

technological premium)

for the controllers of

the platform….

Research Question:

Will this datafication of the agricultural value chain

boost the competitiveness of agriclusters in emerging

countries like Kenya? Or will it instead widen the

knowledge gap, with actors from more advanced

economies monopolising control over the technological

surplus generated by digital data on farms in both North

and South?

EMBRAPA (Empresa

Brasiliera de Pesquisa

Agropecuaria)

California’s Central Valley

Kenya’s Rift Valley Potentially Brazil

1. To encourage African tech developers to look beyond the NIE

frame and see both the limits of NIE, and the potential

opportunities of a wider paradigmatic horizon.

2. To draw attention to the research context, both in terms of the

funding of ICT related research within African countries, but also

the ways in which ICTs are being embedded within research

partnerships in other areas such as agriculture and social policy.

3. To see these research partnerships as being marked by commercial

imperatives, and thus to a certain degree, competitiveness over

the knowledge or technological surplus generated through digital

intermediation and data.

4. To push back against a technologically deterministic account of

digital economic change by demonstrating how the economic

impacts of digital technologies critically depend on the nature of

the dominant developmental paradigm or ideas being pursued by

its firms, policy-makers and funding agencies.

Conclusions

Questions?

Some relevant publications (happy to share any of them): Kleibert, J. and L. Mann (Unpublished but Draft Available) Capturing Value Amidst Global Restructuring? Economic Development and Information and Technology-Enabled Services in India, the Philippines and Kenya Mann, L. (2018) Left to Other Peoples Devices: A Political Economy Perspective on the Big Data Revolution in Development Development and Change 49(1): 3-36. Foster, Christopher, Graham, Mark, Mann, Laura, Waema, Timothy and Nicholas Friederici (2018) Digital Control in Value Chains: Challenges of Connectivity for East African Firms Economic Geography 94(1) Connectivity at the OP Forum (2017) Connectivity at the Bottom of the Pyramid: ICT4D and Informal Economic Inclusion in Africa Bellagio Centre White Paper, December 2017. Mann, L. and M. Graham (2016) The Domestic Turn: Business Processing Outsourcing and the Growing Automation of Kenyan Organisations Journal of Development Studies 52(4): 530-548. Mann, L. and E. Nzayisenga (2015) Sellers on the Street: the Human Infrastructure of the Mobile Phone Network in Kigali, Rwanda Critical African Studies 7(1): 26-46

My email: [email protected]

My twitter: @balootiful (personal) and @TwoGreenValleys (new project- content coming

very soon!)